We investigate the association of related party transactions (RPTs) with the sensitivity of firm-level capital allocations. We examine whether opportunistic RPTs are associated with investment and external financing sensitivities to both Tobin’s Q and internally generated cash flows. We expect...

This paper reports the results of experimental economic markets that examine whether accounting uncertainty impacts an auditor's objectivity in a setting where the auditor also has an incentive to build and maintain a reputation for objectivity. In particular, we explore if an auditor's...

This paper develops a theory that explains why the government, on behalf of the public it serves, demands audits of public companies. Our theory argues that the government demands audits as a way to minimize private and public transaction costs defined as "the cost of measuring the valuable...

This paper reports the results of experiments designed to examine whether investor selection of auditors enhances auditor independence. The experimental design enables us to explore the effect on independence of different institutional rules over who hires and fires the auditors and to directly...

This paper reports the results of experiments designed to examine whether investor selection of auditors enhances auditor independence. The experimental design enables us to explore the effect on independence of different institutional rules over who hires and fires the auditors and to directly...

This paper examines IPO assurance fees to assess the use of industry specialization as a differentiation strategy by audit firms. Theory suggests that as an audit firm's share of a client industry increases their costs will decrease and their service quality to that industry will increase. In...

We examine the impact of an ethics education program on reporting behavior using two groups of students: 4th year Masters of Accounting students who just completed a newly-instituted ethics education program, and 5th year students in the same program who did not receive the ethics program. In an...

This study uses experimental economic markets to investigate the impact of risk and the potential for loss on managers’ demand for audit quality. We posit that these two important contextual factors influence managers’ audit quality preferences. We study these factors because they are...